Independent philanthropy must navigate a thin line between the fanciful and realistic; the far-fetched and proven; the merely risky and outright foolhardy. Cross that line in one direction, you are doing crazy stuff, cross to the other side and you are not creating change.

by Andrés Spokoiny

I played an April Fool’s Day prank on the Jewish Funders Network staff. I told them a major funder wanted to start a project to get Pluto designated a planet once again. As you may remember, poor Pluto was “downgraded” in 2006 and is now a mere “dwarf planet” that’s no longer a full-fledged member of the solar system.

This imaginary funder was upset by this and was willing to invest significant philanthropic dollars in a scientific crusade, so to speak, to redeem Pluto. He also, purportedly, believed the project could have great potential to encourage youngsters to study science and imagined there could be close collaborations between American and Israeli astrophysicists that would make Israel a leader in the field.

The staff fell for it and started their research. Was there any leading Israeli university concerned about this? Was there any potential Jewish aspect to this? They also explored whether funders would be interested in such an idea. A meeting about the “Pluto project” was scheduled. Finally, concerned about the time this was taking, I put the staff out of their misery.

Being the boss gives you a certain impunity with regards to bad jokes, but I felt a little (just a little) bad about the prank. So I consoled myself saying that maybe it wasn’t a prank but an experiment. I started to think the success of my prank says something not about the staff’s gullibility but about Jewish philanthropy. After all, intelligent people that know the Jewish philanthropic community better than anybody else believed it was plausible that a “major Jewish funder” would invest in such a project. They are so used to seeing whimsical funding decisions and capricious definitions of priorities that this sounded a little odd, but not completely out of this world.

Now, is it that good or bad?

Probably a little of both.

Independent philanthropy must navigate a thin line between the fanciful and realistic; the far-fetched and proven; the merely risky and outright foolhardy. Cross that line in one direction, you are doing crazy stuff, cross to the other side and you are not creating change.

Independent philanthropy is about taking risks that communal philanthropy – or the state – can’t and probably shouldn’t, take. For example, can the government invest millions in researching a drug that might cure cancer but for which evidence is flimsy? Or should that money be invested in things like fighting obesity, which we know have a positive effect on health and life expectancy? Should a Federation invest in a new outreach program that potentially can attract young adult Jews or use that money in helping the 22 percent of Jews that live below the poverty line?

Independent philanthropists are unencumbered by the public bureaucracy. They don’t have a fiduciary responsibility to donors or taxpayers. So they can, and should, take bigger risks than communal philanthropy. That is not to say that a Federation, for example, shouldn’t take risks, but independent funders should be ready to absorb more risk because they don’t have to maintain a network of services and programs to cover basic needs.

Philanthropy needs to both support the basic network of the community and act as its R&D department. It can pilot new, seemingly crazy ideas and see if they work. In Israel, for example, there are great instances of collaboration between the State and philanthropy by which social projects are pilot-tested by philanthropists after which the government takes them over once their efficacy is proven.

Now, taking risks and being more open to creative ideas can’t be a license to be capricious, erratic or impulsive.

Philanthropy has a public responsibility and it needs to use its freedom responsibly. It may be legal for a foundation to invest in bringing back Pluto, but it’s certainly not legitimate.

There are five things funders must do to avoid falling into whimsical funding:

• Research and know the field. You could get lucky and hit a vein by blasting random holes in the ground, but you have a better chance if you consult a geologist. Research in the Jewish community is, unfortunately, devalued, but it’s one of these things that are more expensive when not done. Research is not only a matter of asking “experts” but establishing a dialogue with clients and beneficiaries of grants.

• Strategic clarity. Many bad funding decisions can be avoided by asking a simple question: what is the problem my funding is trying to solve? How does a particular grant bring me closer to solving that problem?

• Talk to others. Funding in isolation has a tendency to become whimsical. We need to ask whether what we are doing has been tried before. What are other funders doing? What are communal organizations doing? Am I trying to reinvent the wheel? Communication is not ‘one-off’, rather, funders need mechanisms to consult and cross-pollinate with peers and partners.

• Keep a balance between focus and flare. There are moments when funders need to allow for many new ideas to flourish, so funding many different projects makes sense. It is also necessary, however, to stay focused on key initiatives to allow for long-term effects to be more apparent.

• Evaluate the right things. If I’m to evaluate the “Pluto project” I could say that a scholarly paper proves that Pluto should be considered a planet. But is that success? Conversely, I could say “I sent 200 kids to Hebrew school,” but is that success? Evaluation needs to ask hard questions about long-term impact and ultimate outcomes. What changed in the community thanks to my grant? Is the problem I wanted to solve closer to be solved? Evaluating impact is never easy, and sometimes requires us to live with some degree of uncertainty (Sometimes we simply can’t wait 20 years to see if, say, an educational program caused a lower assimilation rate). But measuring only what we can instead of what we should isn’t a solution.

Funders can effect change by taking high risks and funding untested ideas. They also live with the permanent danger – temptation even – of erratic and whimsical funding. Keeping the balance is critical it is like walking on a tight rope over Space. We need to do it carefully, for if we fall to one side we fall into the black hole of the status quo; if we fall to the other, we are drifting in space looking for Pluto.

Andrés Spokoiny is President and CEO at the Jewish Funders Network.